Short-term certificate of deposits that pay interest periodically on roll dates. On each roll date, the coupon on the CD is adjusted to reflect current market rates.
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Variable-Rate Certificate of Deposit
A certificate of deposit for which the interest rate changes according to some formula at set intervals. Investors use variable-rate certificates of deposit when they want a low-risk investment but expect prevailing interest rates to rise during the life of the CD. See also: Variable-rate bond.
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